THE MAN OF SYSTEM CANNOT FLIP THE LEVER OF RICHES.

Marginal Revolution manager Tyler Cowen notes, "Nobel Prize in economics goes to Philippe Aghion and Peter Howitt and Joel Mokyr."  It's encouraging to see the award recognizing something other than the technocratic Welfare Economics Paradigm.

Excellent choices.  Here is the press release with links to longer discussions of their works.

This is a prize for economic growth, and for the ideas of creative destruction.  Those are some of the most important ideas in economics, so I could not be happier with this pick.  Joel Mokyr in particular has been a long-time associate of GMU and Mercatus, so I would like to congratulate him in particular.

Aghion is at INSEAD in France, Howitt at Brown, and Mokyr at Northwestern.  It is also nice to see some people outside of “the usual schools” winning the prize.  Aghion and Howitt, of course, worked together to produce a model of creative destruction and economic growth.  Here are their key papers together.

Joel Mokyr is an economic historian, and best known for his pioneering work in explaining the Industrial Revolution in England.  Here are his best-known works.  Read The Lever of Riches and The Gifts of Athena and A Culture of Growth.  I have benefited most from The Enlightened Economy: An Economic History of Britain 1700-1850.  He has a new book coming out in November, with Tabellini and Greif.  It is correct to consider him as an “Enlightenment thinker.”  Brian Albrecht has a good thread on this.

Below you can find individual posts on Aghion, Howitt, and also Mokyr.  Here is Alex’s post on the prize.

By all means surf over to all the links!

We're savoring recognition of ideas regular readers have long encountered.

No surprise to readers of The Lever of Riches or How The West Grew Rich or Human Action, but how many history students, let alone casual readers, have even a passing familiarity with works that are obscure or recondite even to working economists?  Likewise, regular Cold Spring Shops readers get that Complex Adaptive Systems Do What They Darn Well Please.  It's encouraging to see a discussion of The Great Depression that notes (p. 279), "[I]n a free market economy, though some people have much more power than others, no one is in charge.  All the material aspects of the economy ... rely on personal and institutional choices."  Thus "an unforeseen development is usually in the offing."

An economic historian who is also worthy of recognition, Deirdre McCloskey, called attention to these ideas two score years ago.

The proper question to put to anybody who poses to know What Ought To Be Done is the American Question: If you're so smart, why aren't you rich? Yes, I'm yet again channeling Deirdre McCloskey's The Vices of Economists - The Virtues of the Bourgeoisie (details or compare prices), this time quoting from p. 115.

The other problem is that social engineering [the technocratic vision -- Sup't.] is hostile to freedom. I realize that saying so will make a lot of my economist colleagues angry, since they have no such end in view when they advise the government of Holland or of America. But I can't see how to get out of the dilemma. Either you respect people as free adults and leave them alone. [Yes, even when they drive Harleys.] Or you don't, and want to engineer them. Social engineering is not about some personless abstraction called "Society" or "The Economy." It is about actual people, Trees Kettering or Deirdre McCloskey or Joel Mokyr. It's not really "social engineering." It's "people engineering."

The technocratic vision ... is it indeed passing from the scene, or will there be new generations of politicians and academicians to restore it?

Perhaps the economics establishment recognizing, in this intriguingly partitioned prize (Professor Mokyr gets half, Professors Aghion and Howitt divide the other half, what sort of Mishna is at work?) the limits to "people engineering."  Perhaps Sweden doing less people engineering during the corona shutdowns makes emergence respectable?